At 5pm, the benchmark index slid to 1,852.03 points, though the small-cap index held firm with a marginal 0.05-point slip, ending the day at 14,579.9 points.

"I think it is rotational. Fund managers have possibly repositioned themselves to take advantage of the small- and mid-cap stocks after seeing emerging values," said Rakuen Trade Sdn head of research Kenny Yee when contacted.

Yee said while it is widely expected that the US is not looking to hike interest rates, all eyes are on its upcoming policy statement to gather clues on the future pace of US monetary tightening.

Reuters reported that the policy-setting Federal Open Market Committee is scheduled to release a statement early Thursday, while the US latest jobs data are due Friday.

Investors are betting that the Fed is likely to keep rates steady this month, but will likely encourage expectations that it will lift borrowing costs in June, on the back of rising inflation and low unemployment.

In Malaysia, a total of 2.1 billion shares worth RM2.44 billion crossed on the back of a largely negative market breadth. A total of 551 counters declined, outstripping 311 advancers.

Index-linked Nestle (M) Bhd and Hong Leong Financial Group Bhd led the fall today, with Nestle shares shedding RM4.90 or 3.55% to RM133.10, while the latter lost 44 sen or 2.26% to settle at RM19.04.